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What do Crypto Owners & The Average Person think about NFTs?

Wednesday, February 9, 2022 • 5:00 PM EST

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Consumer Insights
This article was created through qualitative survey data combined with verified spend data for Crypto exchange deposits & withdrawals, find out more about the tool here

Key Takeaways:

1. 25% of Crypto Owners also own an NFT; Crypto Owners are 2.5 times more likely to own an NFT than the general population
2. Consumers are not willing to spend a fortune on NFTs, with the majority of intenders wanting to spend $50 or less on their asset. However, brands launching NFTs may be bringing more price insensitive consumers to the market
3. The general population has a higher likelihood of knowing NFT marketplaces with lower barriers to entry cost-wise (e.g., Mintable), while Crypto Owners prefer platforms with a slightly higher barrier to entry but a lower barrier to exit (e.g., OpenSea)
4. While the dialogue in popular culture centers around art, consumers are interested in purchasing NFTs to make a buck. Profitability was a top motivator for 79% of Crypto Owners and 66% of crypto non-owners
5. Despite efforts from brands to popularize utility NFTs, art and collectible formats remain the most recognized NFT formats

Non-fungible tokens (“NFTs”) have exploded in popularity since Fall 2021. With an ever growing list of celebrities, athletes, and influencers vying to showcase their digital assets, it’s evident that the technology has entered the mainstream. 
Yet, NFTs remain an enigma for many. To demystify what NFTs mean for the everyday public, Cardify surveyed 1,600 Gen Z and

Millennial consumers in January 2022 to understand how they perceive and participate in the space. Further, Cardify sought to explore how seasoned Crypto Owners (ie., those who have deposited into an exchange in the last 12 months) differ in their responses from the general population. It’s hypothesized that Crypto Owners will be more optimistic and involved with NFTs due to their familiarity with the underlying technology.

What do people know about NFTs?

Cardify first asked respondents to self-identify how well they understand NFTs. The large majority of the general population reported being total novices (56.7%) or beginners (20.2%) when it came to NFTs. This compares to a similarly large majority of Crypto Owners reporting they are total novices (41.5%) or beginners (31.7%).

Digging deeper into NFT understanding, people are most familiar with art NFTs and collectible NFTs, and people are least familiar with utility NFTs across both cohorts.

To validate self-identified levels of understanding, Cardify asked people to choose the correct description of an NFT from a drop-down list. Just under one-third (32.0%) of the general population got this question right, while about half (51.8%) of Crypto Owners answered correctly.

Who owns NFTS?

When it comes to NFT ownership, the cohorts begin to diverge. It seems Crypto Owners are more likely to own an NFT compared to the general population (25.1% versus 10.0%). However, they are slightly less likely to have NFT adjacency, meaning knowing someone who owns an NFT but not owning one themselves (20.8% versus 23.2%). Regardless of ownership or adjacency, though, the majority of both Crypto Owners (54.2%) and the general population (66.8%) have never owned an NFT.

A further divide occurs when asked about purchase intent for the future. Among Crypto Owners, 65.6% say they intend to buy an NFT at some point, compared to just under half (46.7%) of the general population.

More specifically, it seems both cohorts want to buy art and collectible NFTs the most, perhaps partly owed to these categories being the most familiar to individuals.

What are people willing to pay for NFTs?

Cardify drilled down on pricing and other qualitative factors to better understand purchase drivers for NFTs. In this case, Crypto Owners are willing to spend slightly more on NFTs. However, across both audiences, there does not seem to be much appetite for spending an extreme amount. The majority of the general population (63.6%) and almost half of the Crypto Owner group (49.7%) prefer to spend $50 or less to buy an NFT.

Despite the frugal majority, 2.8% of the general population and 2.3% of Crypto Owners indicated they would be willing to spend more than $4,000 on an NFT. Relating this to headlines about brands releasing digital collectibles, most of the big-ticket NFTs are out of reach for the average consumer. Nevertheless, these NFTs have succeeded due to the brand’s premise and alignment with exclusivity, all while bringing in new price insensitive customers to the world of NFTs. The actualized success of luxury brand NFTs (e.g., Adidas or Gucci) provide a real life example of the price insensitivity of a select few. 

Many non-price factors would motivate someone to buy an NFT. Across both audiences, profitability and return on investment were the most common reasons by a wide margin (64.5% of the general population and 78.6% of Crypto Owners). Usefulness and market price stability were the runner ups. Fear of missing out (FOMO) is only a fringe driver, with only 10.2% of the general population and 12.1% of Crypto Owners saying it matters to them.

Where are people buying NFTs?

Regardless of NFT awareness, it seems people aren’t sure where to buy them. Over half of the general population (58.1%) and the Crypto Owner population (50.4%) had not heard of any of the listed major NFT marketplaces. Among those who recall the marketplaces, the general population is most familiar with Mintable (17.3% know it), while Crypto Owners are most familiar with OpenSea (27.8%). 

This difference between cohorts can be attributed to barriers to entry. Mintable allows NFT beginners to mint for free on their platform, allowing them to bypass transaction fees for creating an NFT. A caveat would be that the freely minted NFT would only be tradable on Mintable’s ecosystem, requiring users to pay transfer fees if aiming to sell elsewhere. Individuals more familiar with Crypto would have a higher likelihood to pay these initial fees that deter new users.

For those who have used NFT marketplaces to purchase their NFT, OpenSea is the most popular with nearly one-third of the general population (32.7%) and the majority of the Crypto owner population (64.5%) using the platform. The next most popular platform for the general population is TokenTrove, while the next most popular for Crypto Owners is Mintable.

What real life benefits do NFTs offer?

A common question about NFTs is whether they offer any real-world benefits or are more like digital versions of collectible items similar to Beanie Babies or Barbie Dolls. It seems that the most common answer for both the general population and Crypto Owners is simply “I don’t know.”

Among those with an opinion of real-world benefits, the top-cited possibility was turning real-world assets into tradable NFTs, such as real estate tokenization. The second most-cited possible benefit is additional security for trading non-fungible assets.

People also aren’t sure how they feel about types of NFTs that already have real-world benefits attached (e.g., discounts or access to events). In the general population, 49.4% say they have neutral feelings, 37.6% support these NFTs, and 13.0% dislike these NFTs. Things skew more supportive amongst the Crypto owner population: 53.0% support, 37.5% are neutral, and 9.5% dislike.

What does the future hold for NFTs?

Finally, Cardify asked people whether they believed NFTs would become more or less popular across two time horizons: short-term (next 12 months) and long-term (3+ years into the future). 

Consumers are generally optimistic about NFTs in both the short-term and long-term. About half of the general population believe that NFTs will become more popular in the future - a significantly larger share of respondents than those who hold the opposite pessimistic view. Crypto Owners are even more bullish, with 60.6% citing that NFTs will gain in popularity

Returning to the categories and types of NFTs, both audiences believe that art NFTs will remain most dominant, followed by collectible NFTs. However, the audience shows a divide for the 3rd most popular category. Crypto Owners believe metaverse NFTs will be more popular than the general audience’s choice of game NFTs. Individuals in the Crypto space may have a higher understanding of current options, as a large portion of the current metaverse coins is game-related (e.g., WAXX).

Coming together on NFTs

As theorized, Crypto Owners know more about NFTs and are more likely to own a digital collectible than the general population. They demonstrate stronger future purchase intent and are less price sensitive. Crypto Owners are comfortable operating with more “skin in the game”, as evidenced by their preference for marketplaces with higher cost of entry (e.g., OpenSea). 

Crypto Owners are more likely to believe the benefits of NFTs in both digital and physical contexts. They show stronger support for utility NFTs, perhaps because they have a better grasp of the technology’s abilities beyond what’s currently popular. By contrast, the general public is more limited to considering NFTs as art or collectibles. 

Despite the above differences between cohorts, there is alignment between Crypto Owners and the general public towards select facets of NFTs. Motivation is a standout, with all respondents indicating that profit is an important factor for their participation. Future outlook is also shared - both cohorts believe that the world of NFTs will continue to grow in popularity although they are still hesitant about the very long term. 

As of right now, it appears that people are generally curious about NFTs but don’t yet have a complete understanding of what they are, what benefits they provide, and where to buy them. Despite this apprehension, purchase intent continues to grow, and if that is any indicator then the NFT bulls may be vindicated in their beliefs before long.